Facilitating savings for agriculture: field experimental evidence from Malawi

Replication paper
Original publication: Economic Development and Cultural Change
Original researchers: Lasse Brune, Xavier Gine, Jessica Goldberg, Dean Yang
Replication plan:

Stage's Replication plan

Replication researchers: Jesper Stage
Current status: Completed Replication Study

The Original Study

Brune and colleagues investigated whether facilitating formal savings of agricultural revenue among Malawian tobacco farmers would lead to subsequent increases in agricultural inputs and, hence outputs in the next farming season. A randomized intervention was carried out where farmers in randomly selected farmer groups were offered help with setting up savings accounts and, for some of the randomly selected groups, offered additional incentives to save. As anticipated, the treatment led to increased spending on agricultural inputs in the next planting season, and thus to higher crop revenue and subsequent household consumption. Interestingly, however, little of this impact can be directly attributed to increased savings; while the treated farmers did save more of their crop revenue, they withdrew most of these additional savings well in advance of the next planting season. Thus, while the treatment clearly did have the desired effect of increasing subsequent input spending and crop revenue, the exact mechanism through which this happened remains to be explored.

The Replication

Improving access to savings has become a popular policy strategy in developing countries, but the actual impacts remain poorly explored. Thus, Brune et al. provide an important contribution to the literature. This replication study will seek to verify the robustness of their findings both through a standard pure replication and through a robustness check that examines how sensitive the findings are to outliers and to the choice of econometric specification. Relatively few farmers who were offered help with setting up savings accounts actually set up and used accounts, at least within the relatively short one-year timeframe of the experiment. This replication study will therefore also analyze the effects for those famers who actually used the accounts, as these farmers are likely to set an example for other farmers and their success (or lack thereof) is likely to affect future uptake of the accounts by other farmers.